VistaJet flies only Bombardiers and only the biggies favoured by the millionaires and billionaires with transcontinental and intercontinental travel needs. The sweetest bit of hardware in his fleet is the Global 6000, which can fly 15 passengers non-stop for 11,000 kilometres, can sleep seven, two of them on a queen-sized bed, and comes with Wi-Fi, two lavatories and a cabin hostess so you don’t have to schlep three or four metres to the champagne cooler. The price in the United States (the only market where pricing is publicly disclosed) is $15,950 per “occupied” hour, meaning the meter is off while you’re waiting for a takeoff slot.
The son of a teacher, Mr. Flohr was born in Switzerland, had a “very humble upbringing,” studied political science at Ludwig-Maximilian University in Munich and went into the finance business.
Along the way, he married, and later divorced, Katharina Flohr, who would become the creative director of Fabergé and editor of Russian Vogue. He landed at Comdisco, a Chicago finance company that catastrophically strayed into tech investments and became one of the more spectacular casualties of the dot-com bust of 2000.
Mr. Flohr, who had cleverly left the company the year before, snapped up most of Comdisco’s European asset-finance arm during the bankruptcy proceedings.
To get around Europe, he chartered aircraft and found it bad value for money. The planes came in all sizes and conditions and would sometimes get yanked from service at the last minute if their owners suddenly needed them. “I was so unhappy with the quality of the charter business that I decided to go out and buy my first plane,” he says.
His first purchase, from Bombardier in late 2003, was a second-hand LearJet, the smallest product in the Montreal-based company’s biz-jet fleet. He had it painted silver, accented by a thin red stripe along the entire length of the fuselage. Except for the addition of artwork on some of the tail fins, the design has not changed.
But it wasn’t design so much that set VistaJets apart. It was the company’s business model.
At that time, there were two ways to book a private aircraft. You chartered one from an owner or you went to NetJets, the pioneer in the “fractional” ownership industry, in which, typically, four investors would split the cost of a plane and divvy up the flying hours. The owners had to finance the purchase, take on the asset risk and still pay the maintenance and operating costs. In exchange, they would get guaranteed availability.
Mr. Flohr’s plan was a go-anywhere any-time fleet of big jets that he would own and rent, with all the costs rolled into the hourly price. He would buy only new jets and sell them after four or five years, while their residual values were still fairly high and their warranties intact. He estimates that the biggest jets retain as much as 70 per cent of their value after that much use. “The most significant downside of fractional ownership is that there is no market to sell your fraction other than who you bought it from,” he says.
He would also have enough bases around the world to avoid a lot of profit-killing empty return flights.
The concept took off, although there were scary moments. In the 2008-2009 financial crisis, he was terrified that the banks that financed his jet purchases would collapse. “The instability of the system was extreme,” he says. “I had a European bank and the bank almost went under. They held the mortgages on my planes. If they had taken my planes – boom! – where’s my equity?”
Since VistaJet is private, it does not make its financial statements public. But Mr. Flohr says it pumps out “strong” cash flow and operating profit. Revenue rose even during the financial crisis, although he had to drop the rental prices to keep customers.